Nvidia Smashes Earnings, Rekindles the AI Rally

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Market wrap:

• U.S. stocks climbed on Wednesday as investors positioned ahead of Nvidia’s earnings, with the S&P 500 and Dow Jones Industrial Average snapping a four-session losing streak. The Nasdaq also advanced, though all three benchmarks remain lower for the week after the recent rout in growth names. Nvidia surged in late trading after delivering another earnings beat and forecasting revenue ahead of expectations, igniting a rally in Asian semiconductor stocks overnight. Minutes from the Federal Reserve’s October meeting, released Wednesday afternoon, showed officials divided over whether cooling labor conditions or stubborn inflation pose the greater risk to the economy. The split also extends to the December policy outlook, with “many” policymakers signaling that no further cuts are planned this year.
• Market pricing reflects the shift: fed-funds futures now assign roughly a 33% chance of a quarter-point reduction next month, sharply lower than a month ago, according to the CME FedWatch Tool. Bitcoin remained volatile, swinging lower again and sending crypto-linked equities into disarray. Shares of Coinbase dropped back below their 2021 IPO price. Attention now turns to Thursday, when the delayed September nonfarm payrolls report will be released following the government shutdown.

Nvidia Smashes Earnings, Rekindles the AI Rally

• Nvidia delivered another blowout quarter, easing concerns about an AI slowdown and sending shares up more than 4% in late trading. Fiscal third-quarter adjusted EPS of $1.30 beat estimates of $1.25, while revenue surged to $57.01B versus $54.92B expected. The chipmaker guided about $65B for the current quarter, well ahead of the $61.66B consensus. Data-center revenue, the core of the AI build-out, jumped 66% to $51.2B, driven by strong demand for Blackwell GPUs and networking hardware. CEO Jensen Huang pushed back on speculation that AI demand is peaking, saying the company is seeing “something very different.” 
• Michael Burry renewed criticism of chip depreciation practices after the results, arguing hyperscalers may be overstating GPU lifespans to soften reported expenses. He cautioned that full utilization doesn’t necessarily translate into economic value, even when older chips remain heavily booked. Nvidia now has $500B in AI chip orders across 2025–26, and cloud GPUs remain “sold out,” even as Microsoft, Amazon, Meta, and Alphabet lift AI capex beyond $380B this year. Legacy operations also delivered strong growth, including a 30% rise in gaming revenue and a 56% increase in professional visualization, while China was the lone weak spot due to export restrictions.

Stocks on the move:

• AI chipmakers: Shares of companies tied to demand for artificial-intelligence computing power are trading higher after Nvidia’s earnings report. Advanced Micro Devices (AMD) jumped more than 5%, Broadcom (AVGO) rose nearly 2%, Taiwan Semiconductor (TSM) climbed 3%, and Super Micro Computer (SMCI) added 6%. Cloud-computing giant Oracle (ORCL) gained nearly 3%.
• Palo Alto Networks (PANW): Shares slipped more than 3% in after-hours trading despite narrowly topping fiscal first-quarter earnings and revenue estimates. Guidance disappointed slightly, with the company forecasting second-quarter revenue of $2.57B–$2.59B, versus $2.58B expected by analysts polled by LSEG.
• Oddity Tech (ODD): Shares surged about 21% after the beauty-and-wellness platform beat expectations on both revenue and profit. Oddity reported adjusted EPS of $0.40 on revenue of $148M, compared with analyst estimates of $0.35 on $145M, according to LSEG.

Watchlist: NVDA, AMD, AVGO, SMCI, ORCL, PANW, WMT, NTES

Key Economic Events Today:

EST time

08:30 am: USD Non-Farm Employment Change
08:30 am: USD Unemployment Claims
08:30 am: USD Unemployment Rate
08:30 am: USD Philly Fed Manufacturing Index
10:00 am: USD Existing Home Sales
11:00 am: USD FOMC Member Cook Speaks
12:40 pm: USD FOMC Member Goolsbee Speaks



Earnings

BMO (Before Market Open): Walmart (WMT), NetEase (NTES)
AMC (After Market close): Intuit (INTU), Ross Stores (ROST)

 

The TEFS Analyst team wishes you a successful day!